Adding Grocery to Your Amazon Sourcing Strategy

At the beginning of 2014, Stephen and I (Rebecca) sat down and discussed our goals for the coming year — individually, as a family, and for our business. We both love setting goals and working towards them, relishing the feeling of success that comes from seeing improvement as a result of consistent work. (If you haven’t read our post on SMARTER goals, you should take a look at it and see if it gives you some ideas for goal setting in your FBA business.)

One of our top goals for the FBA business this year was to branch out into sourcing at liquidation stores. Coming out of Q4, we had a nice amount of capital to invest, and we felt the time was right to push ourselves beyond the places we’d been sourcing in 2013. We took that opportunity to conduct a little “liquidation store experiment” — you can read more about our first liquidation store visit and our experience with Jessica Larrew’s book Liquidation Gold in this blog post. The short version is this: we enjoyed our first visit and have since made liquidation stores a part of our normal sourcing routine.

So far, we’ve had more success at finding grocery items to resell from liquidation stores than items in health, beauty, or any other category. Because of this success, we wanted to broaden our knowledge of sourcing for grocery items. Once again we turned to Jessica Larrew, this time to her book with Beth Maus, Grocery Goldmine: Real World Strategies for Selling Groceries on Amazon.

Just as Liquidation Gold gave us both knowledge and motivation to find liquidation stores in our area and start sourcing, Grocery Goldmine helped us think strategically about our goals for our grocery inventory and how we wanted to accomplish them. Jessica and Beth don’t just write out a list of items or stores and say, “Here’s where to go and what to buy. Get after it.” They walk you through the thinking behind certain decisions you’ll make for your grocery inventory: how to get the highest profit margin possible, how to be competitive in a growing market, how to make the tough decision to pass up an item that’s good for an item that’s great.

At the end of each section, they give “Real World Examples” and short assignments for you to complete. I found this part of each section to be extremely helpful. The Real World Examples make the concepts concrete, and the assignments are designed to get you started on putting into practice what you’ve learned. They aren’t theoretical assignments, either — I mean, at the end of one section, I turned off my Kindle and immediately went to the grocery store to finish the assignment. I guess I could have waited to go, but I was so pumped about the potential for finding new inventory that I just got up and left. I came home that day with five items to test selling through FBA. Within this past month since that first trip, all but one item has sold already, and we’ve restocked one of those five items multiple times. We’ve started sourcing at a handful of other stores in our area and continue to come up with new ideas for where to source for groceries.

Overall, we’ve been very pleased with the addition of grocery items to our inventory this year. We’re not slowing down with our previous big selling categories (toys, books, home, kitchen), but grocery has added a nice stream of income along with the other categories. We really like that the additional sourcing for groceries keeps our schedule each week different and interesting, and it has the potential for a measure of stability (translation: people buy groceries from Amazon all year long, not just in Q4).

Let me finish up with a word about the restrictions Amazon has put in place for the grocery category. Don’t let the restriction scare you off. If you’ve been selling grocery items on Amazon before now, then you should already be approved to sell in that category. If you have not been approved, all you need to do is follow this link (sign-in required) to apply.

My friend, Jessica has put together the exact steps you can follow to get approved in grocery (as well as other categories). To find out exactly what to do, click here, and then type this into the search bar: “how to get approval in the restricted categories on Amazon for FBA Sellers.” That will lead you to a page that will help walk you through many categories and how to get approved.

Once approved (most requests take about 24-48 hours to process), then you can start adding grocery items to your growing Amazon business model.

Grocery Goldmine is worth its weight in gold. It includes over 25 chapters with 80 pages of information that will get you excited about adding grocery to your Amazon sourcing strategy. The book also includes 4 bonuses. The bonuses include a video on creating multi packs, a bonus chapter of creating bundles, a video on photo editing for new grocery listings, and more.

So what about you? What successes have you found in the grocery category?

Amazon Pantry is still very new and not a lot is known on how to best respond to Amazon Pantry. I’m personally looking forward to it and think that I will become a grocery supplier to Amazon Pantry. What other comments have you seen about this?

Normally I do not take the time to write on a post but I have been seeing many people jump on the “band wagon” of this book and promote it. In of itself, that is not bad but my concern is that I have been seeing more and more bloggers promoting the same thing – Jessica’s book may or may not help but the concern is that how many sellers can jump into the same category and not have prices been driven down to thin margins? Is there no original thinking anymore for true entrepreneur? I see a future where it is going more and more social in the sense that sellers are looking for quick buck and not considering the long term impact on the business and even for the customers they serve if they are not there tomorrow to serve them. Do not get me wrong, I know that many sellers like yourself have been able to support yourselves but how many people are pushing this “bubble” to the brink of popping. Just a word of caution and if you are pushing an author for the sake of pushing.

The reason so many FBA bloggers have been promoting this book is because it’s a HUGE game changer when it comes to finding profitable, replinishable, inventory to sell via FBA. I would have paid $99 for this ebook from all the things I learned from it.

I understand your concern about more and more sellers getting involved in selling grocery and how that might drive down profits, but I think that is a long, long way off. New sellers come and go all the time, and only the sellers who are commented to doing what it takes in the long term will succeed.

I don’t understand you question, “Is there no original thinking anymore for true entrepreneur?” The reason I don’t understand is because 99% of my blog is original content, and I only recommend quality products from others if they really do help. I also wrote an ebook on the topic of board games. I think this blog, and other FBA blogs are loaded with original content.

I most definitely am not looking for a quick buck in promoting any product by an FBA expert. I only promote products that I have used myself and have found success.

My goal with Full-Time FBA is to offer up any and all help to my fellow FBA sellers. This includes how-to articles, tips, tricks, suggestions, resources, and ebooks. If you follow me on twitter or facebook, you’ll even see me promoting many free ebooks. I do this to help others.

I love being able to work for myself and support my family. I love helping others to accomplish the same thing.

Hi Stephen and Rebecca,
I guess I’m lagging behind in hearing about the Amazon Pantry mentioned above, spending too much time learning how to sell groceries 🙂 I Googled it and see that AZ has entered the business of selling groceries to Prime buyers. Sometimes it feels that they operate as a contradiction to FBA sellers, meaning by capturing the market of so many items that we are already selling. Thank goodness there is a lot of “stuff” out there to sell.

When you state above, “Within this past month since that first trip, all but one item has sold already, and we’ve restocked one of those five items multiple times,” are you buying full retail price in grocery stores. I have been doing BOGO’s and finding that it is the only way, so far, to make any fair profit. Maybe I’m not scanning enough or I should expect less than the 3x ratio we are taught. There just doesn’t seem to be that much profit in groceries, unless of course it is at a liquidation store. What am I missing?

By the way, know that you both are most appreciated for the generous information and mentoring you offer to your followers. I have a few other mentors I follow and when they promote another’s book, they are very clear that they receive a stipend for their review. Let me say this, while I appreciate the upfront honesty, in all honesty, I probably would not be purchasing a book without some sort of testimonial or review of any book. So keep up the great service you provide and know that your articles are always anticipated with great eagerness! Best, Barbara

Yes, Amazon seems to want to sell everything too, but I know they do not want to push all FBA sellers out of business. We, many times, are Amazon’s suppliers, and when they sell out, we can profit very well from selling items that amazon usually sells. I usually try to stay away from selling an item that Amazon is already selling. When Amazon sells something, it’s usually a lot lower than everyone else, so I stay away… but there are so many other items that Amazon does not sell, and we try to sell as much of that as possible. It is still possible to compete with Amazon on some items, but it can be tricky.

When we state above, “Within this past month since that first trip, all but one item has sold already, and we’ve restocked one of those five items multiple times,” we are mostly buying items that are on sale or BOGO free. There are some items even at regular price that are good to sell on Amazon, but you have to scan a lot of items to find these. We’ll also accept a ROI that is lower than doubling our money if the sales rank is good enough.

Keep scanning all the sale items at grocery stores, and if you have the time other items while you’re there. You’re bound to find some good stuff!

Groceries are one of top 3 categories using Amazon FBA. You do have to be careful of expiration dates! We buy a lot of food items in bulk then pass the savings on in smaller quantities to Brown Box members. That way we don’t have to worry to much about expiration dates.

“If you have not been approved, all you need to do is follow this link (sign-in required) to apply. If your seller metrics are good, then the application for approval to sell in these categories is very straight-forward. ”

I have not found this to be the case. When I went through the approval process I was startled to learn that Amazon will not accept retail sourcing for the initial approval process as proof of purchase of the goods you wish to sell. It seems that you use retail sourcing from what I have read here. I suppose I could try to get some wholesale items to get the first 3 invoices they require, jumping through hoops and such. I was just surprised that your article had an update but made no mention of this.
Here is an excerpt of the email correspondence I received from Amazon:

“I would like to inform you that you may submit invoices of your purchase
of products you wish to sell on Amazon from manufacturers, distributors
or wholesalers. Kindly note that we may contact the company listed in the
invoice or other third parties for verification.”

Yes, the approval process for Groceries has ben constantly changing with Amazon. Some days they are very easy to work with and approval is easy… and other days, they need pages of proof that you will be an excellent source of quality grocery items. My suggestion is this: If you do not get approval the first time, try again. You might get someone else who will approve you faster than some others. Good luck!

Ian, I received the exact same response today. I’m new (3 months in) and think it is going to be relatively difficult for anyone doing RA to get approved. It’s a shame because I have 2-3 stores with some unique products that I thought would do well.

I’m very new to FBA (yet to list first items). Should I sell stuff in non-restricted categories before I try to get approved in grocery or health/beauty products? I don’t want to go buy a lot and then find out I can’t sell anything either. Also, I did not know about the monthly charge for Profit Bandit??? How do they bill us for that or am I automatically charged through iTunes?
Thanks for your help!

JoAnne,
If I were you I’d focus on the non-restricted categories in order to prove to Amazon that you can be a trusted seller. Then, after some time, I’d attempt to apply for the closed categories by giving Amazon what it needs to be approved for the categories. I wish you all the best!
As for profit bandit, I’m not sure how they will charge you once they start charging the monthly fee. I assume that they will have that information on their website.

I’ve been selling via FBA for a couple of years and am now trying to get into the grocery category. Submitted my request today with receipts from a local store and received the following reply:

“I have checked the invoices and I would like to inform you that we are unable to verify the quantity in each invoice and We need to see that you’re able to purchase a stable and resalable amount of inventory from a reputable supplier and that the invoices reflect that the quantities aren’t for personal use.”

Updating my own post from earlier today.
This afternoon, I received this email from Amazon…

“I would like to inform you that if you provide the same receipts with larger quantities than we can approved the receipts. We can only approve you when we verify all the criteria in the receipts. As per the Amazon policy we are bound to share the supplier’s information that is the reason we are unable to share the supplier’s information.”

Have sent another email asking for clarification on the “supplier information” comment as the receipts I submitted did have supplier info.

Nice Blog Rebecca (Now I see where Stephen gets all his insights from!!!! LOL).

I’ve thought about getting into grocery and with my experience as a former restaurant owner and my established relationships with food reps’s and wholesalers, I think it would be a no brainer. I’ve been looking over hot sellers for holiday and it seems like holiday cocoa packs, chocolates, candies and other themed products might be a good seller and/or provide interesting bundle opportunities. Here in OH we also have a large Amish population and they market awesome grocery products that might be worth investigating. As usual, great advice and we all appreciate your helpful blogs!!!!

Things have changed a little bit since I wrote this article… I’ll update it soon. My friend, Jessica has the exact steps you can follow to get approved in grocery and other categories. First go to: http://www.fulltimefba.com/selling-family
and then type this into the search bar: “get approval in restricted categories.” You’ll find a few blog posts that will walk you through. Hope this helps!

I just got approved in grocery at the end of 2015. It took me over 2 months
going back and forth with them. Submitting invoices, calling seller help etc.
Finally I got approved. It takes some time and you need to keep trying. Just don’t give up.

Just a sidenote, regarding this comment above “If you’ve been selling grocery items on Amazon before now, then you should already be approved to sell in that category.”

Not for me, I sold in Grocery awhile back, a number of items, no problem, didn’t have to go through any ungating back then. Now I have to reapply for Grocery. Cannot list any items. Metrics are perfect, 100% rating. Ungated in other cats, no issues otherwise. Been selling for 8+ years, FBM. They might be approving FBA sellers more leniently. Just a guess, because that way they can keep tabs on your inventory, expiration dates, etc.

Disclaimer

At times, I might include affiliate links of items that I endorse. If you click through and decide to purchase the item linked, I will make a small commission on the sale. I promise to never endorse a product only because I have an affiliate link to it. I only want to post links when it is helpful to you and your business. ~Stephen